Can't change country while registering a merchant account at Google Play

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So my country is FINALLY able to sell paid apps on Google Play. But when I'm trying to set up my merchant account, the dropdown menu that lets you pick a country is "disabled". It says "Argentina" and it won't let me click it or change it in any way.
Any idea why this is happening?
(HowTos)

Ive one question. How do application developers from the countries who are not in this merchant list (like India) publish there paid apps in the market. I mean there must be some way.
Do they have to open a bank account in other country like US and open a merchant account from that.
Is it allowed & legal?